Budgeting for cars?

k6chris

How much have people budgeted in their retirement planning for cars, especially in terms of replacement costs? I have come up with a figure of £3,000 pa - £250 per month, per car. This is buying (say) as two year old £10,000 car and replacing it every four years. Is there a way of getting the cost down substantionally, whilst still having a reasonable and reliable mode of transport. All thoughts and experiences welcome. Thanks!



Car Annual Insurance £350 Tax £200 MOT £100 Service / tyres etc £350 Replacement savings £2,000 Total £3,000 per month £250

Brilley

I think it's a "how long is a piece of string" question, and also depends on what your expectations from a car are?

I think your general figures are probably about right. The biggest cost is going to be depreciation (particularly if you buy nearly new, possibly £3k per year).

Reliability is also a key issue. You may get a car that will last for a good few years before needing any "serious" money spending on it, or you may buy a VW car with an auto box that needs replacement outside of the warranty at a cost of £3k+?

If you are not a car nut and just need low cost transport then get the "simplest" car you can find. Probably one of the newer small engine petrol models. Buy a model with low "complexity" (eg manual gearbox), as this will be cheaper to maintain and should be more reliable.

There is probably an "optimum" time to buy and sell, which is probably buy at about 3 years old and keep for 3/4 years (or longer if it reliable).

For years I only purchased "older" cars and kept them for 5 years, but since finishing work I decided to "treat" myself to something a bit newer and up-market, but the depreciation over two years is more than I spent on my last car!

We also had a 2nd car (for fun - MX5), that we got new and kept for 15+ years. OK it was expensive to buy, but when we sold it the depreciation actually worked out at less than £1k per year, and it only ever needed routine servicing.

...you pays your money etc...

marlot

I keep the running costs in my day-to-day costs.

I then have 4 categories of 'capital', for which I put money to one side each month.

Car replacement (2 x cars every six years)
Caravan replacement (every 8 years)
House maintenance/furniture/major car bill
Health

AnotherJoe

You can keep costs fixed by lease. Easy enough to lease a car for £200-£300 a month.

Sea_Shell

We're currently working on roughly £8000 cost to change (one car) every 5 years.

So just £133 per month.

We have modest taste in cars!!

However, for some, the sky's the limit where cars are concerned!!

brewerdave

One important factor to account for, is the reduction in annual mileage after retirement - I was doing ~ 12000 miles pa private mileage prior to retiring - now the total mileage for 2 cars is less than 7000 pa !!
So I have a 10 yr old car which has only done ~ 35000miles and my wife dives a 7 yr old car which is up to 31000miles.

frugal90

I seem to remember reading somewhere "but at three and sell at eight". That is what I tend to do. Look for reliable cars like Honda jazz etc and motoring should be reasonably cheap. Still think the road tax grab by George Osbourne was ridiculous .

MK62

k6chris wrote: »

How much have people budgeted in their retirement planning for cars, especially in terms of replacement costs? I have come up with a figure of £3,000 pa - £250 per month, per car. This is buying (say) as two year old £10,000 car and replacing it every four years. Is there a way of getting the cost down substantionally, whilst still having a reasonable and reliable mode of transport.

You could try keeping the cars longer - a well maintained six year old car isn't exactly a "shed"......the biggest annual depreciation hits come when the car is youngest.

However, the biggest cost saving factor in retirement, as others have suggested, could well be switching to a single car (though that might not be feasible for some couples).


PS - replacement budget is planned in at £18k (index-linked) every 8 years......annual running costs are accounted for in our normal annual budget.
That said I'm not too rigid on that.......if the mileage is low and the car is still in good condition, and we still like it, I wouldn't rule out keeping it for longer......I might change it sooner though if one of us starts to dislike it for some reason.....

Ganga

brewerdave wrote: »

One important factor to account for, is the reduction in annual mileage after retirement - I was doing ~ 12000 miles pa private mileage prior to retiring - now the total mileage for 2 cars is less than 7000 pa !!
So I have a 10 yr old car which has only done ~ 35000miles and my wife dives a 7 yr old car which is up to 31000miles.

I am in a similar situation,never really wanted a car as i was" white van man " and drove lots of miles,however my son bought a new car and donated his old one to his old man:rotfl:
Now it costs £200 a year to tax,£200 to insure plus fuel,total miles last year 2700 :eek:,but my wife finds it handy for me to take her to the shops on thursday for our big shop:rotfl:

Spreadsheetman

One £10k car every 8-10 years. Something cheap to run with as little to go wrong as possible.

Bravepants

My last car, a Mazda 6, lasted me 12 years. I bought it in 2007 with 37,000 on the clock and got rid of it earlier this year with just over 160,000. Bought a 3 year old Mazda 3,which we hope will last another 10 years!